RMG exporters gain from India's retail boom
A number of western retailers have opened stores in India, which came as a boon for Bangladeshi garment exporters, as the retailers are buying clothing items directly from Bangladesh to sell those in the neighbouring market.
Bangladesh also enjoys a duty-free privilege in the Indian market, as a result of which the demand for Bangladeshi garments is soaring in India, especially among its middle-income consumers, due to competitive prices.
The western clothing retailers started flocking to India when its central government eased rules for foreign direct investment in the $500 billion multi-brand retail market in August lat year.
Retail giant Walmart has already opened stores across the country and several others have followed suit tying up with some local supermarket operators.
Bangladesh's garment exports to India rose by 36.70 percent to $75.21 million in fiscal 2012-13 compared to the previous year, according to Export Promotion Bureau.
A significant portion of garment items meant for Indian retail stores goes from Bangladesh, said Atiqul Islam, president of Bangladesh Garment Manufacturers and Exporters Association.
India and China are the next two big options as the countries have around 260 crore people with a big market for garment items, Islam said.
"We also enjoy a shorter lead-time for exports to India and China compared to the US and EU markets," he said.
The foreign investment regulator of India has recently approved a $110 million investment plan by Tesco, formally paving the way for the British retailer to venture into India, according to Reuters.
Tesco also took the initial steps to becoming the first foreign company to set up a chain of supermarkets in India's retail sector after announcing it had applied to buy a 50 percent stake in Tata Group's Trent Hypermarket.
The government will continue its endeavour for liberalising FDI policy further in the coming weeks for attracting foreign investments, Commerce Minister Anand Sharma said on Wednesday, according to AFP.
Bangladesh's exports to India rose mainly due to duty-free market access, competitive prices, quality of products, and operations of multi-brand retailers in India, said Abdul Matlub Ahmad, president of India-Bangladesh Chamber of Commerce and Industry.
In November 2011, India granted duty-free, quota-free access to all items of Bangladesh except tobacco and alcohol.